What is an industry super fund

An industry fund in the superannuation world is run only to benefit members and was initially set up by unions for workers in specific industries or trades. They tend to have lower fees and aim to give their members a profit, which is why they are often called profit-for-member funds. 

In the past, industry funds would only have members in their respective industries. For example, healthcare workers in Australia would have their employee superannuation contributions sent to the same healthcare industry super fund. However, times have changed and most industry super funds now accept members from all industries regardless of their place of work. 

Industry super funds in Australia are awarded a symbol that indicates they meet the criteria of an industry fund. There are many different types of remaining funds that don’t have this symbol, a popular type being a retail fund. So, what’s the difference between them?

A retail super fund will aim to generate as much money as they can from investments to produce profits for owners. These owners tend to be corporate bodies such as banks, financial institutions and investment companies. The profits are then generally dispersed to shareholders. 

However, an industry super fund is not for profit - or the profit is only for members, as mentioned. 

So, if the investments performed well in an industry fund and generated profit, the money made goes back into the fund. Along with this, the fees that members pay are solely used for fund management and do not provide any revenue to the super company or are paid as commission to financial advisers.

Industry super funds have their pros and cons, and their suitability to you is totally personal. Let’s get into some of their advantages and disadvantages to see if an industry super fund is right for you.

• Lower cost: Typically, industry super funds have lower fees than other funds. Since they aim to benefit members, they tend to charge fewer fees - however this is not the case 100% of the time. 
• Well performing investments: According to data from SuperRatings, industry funds consistently rank in, and dominate, the top 10 performing funds for investment performance, based on returns over the long term. However, past performance does not assure future performance. It also doesn’t account for the risk associated with investing. 
• Industry tailored insurance: As industry funds are originally for different types of workplaces, some funds offer insurance tailored to a specific job role with optional or included extras. 

• Small range of investments: Compared to retail funds, industry funds often have a limited investment option range and don’t allow for a lot of investment freedom.

Yes, it is possible to have an SMSF and an industry fund at the same time. However, this would result in multiple sets of fees that might rack up over time. It’s important to consult with a professional when you are handling multiple accounts in order to get the maximum benefits.

Interested if your super fund is an industry fund? Here is a list of industry funds that carry the Industry SuperFund symbol in Australia: 

• AustralianSuper 
• Cbus
• HESTA 
• Hostplus
• SpiritSuper 
• CareSuper 
• TWUSuper 
• FIRST Super 
• Legalsuper